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“A De-Americanized World”: GOP Antics Are Making The United States Look Pretty Insane Right Now

When there’s a global economic crisis, investors from around the world have spent the last several generations doing one thing: they buy U.S. treasuries. The reasoning, of course, is that there is no safer investment, anywhere on the planet, than the United States of America — which has the strongest and largest economy on the planet, and which always pays its bills.

All of these assumptions, of course, were cultivated over generations, and pre-date the radicalization of the Republican Party.

But what happens when U.S. treasuries are no longer considered safe, Americans can no longer be counted on to pay its bills, and the nation’s most powerful economy chooses to default on purpose? The world starts reevaluating old assumptions, that’s what.

In Britain, Jon Cunliffe, who will become deputy governor of the Bank of England next month, told members of Parliament that banks should be developing contingency plans to deal with an American default if one happens.

And Chinese leaders called on a “befuddled world to start considering building a de-Americanized world.” In a commentary on Sunday, the state-run Chinese news agency Xinhua blamed “cyclical stagnation in Washington” for leaving the dollar-based assets of many nations in jeopardy. It said the “international community is highly agonized.”

I know I’ve been pushing this thesis in recent weeks, but it’s important to remember the unique role the United States plays in global leadership and the extent to which Republican antics in Congress will change the dynamic that’s been stable for the better part of the last century.

No major western power has defaulted since Hitler’s Germany, so this week may add some history to the potentially catastrophic economic consequences, and the world is watching closely.

Indeed, try to imagine explaining this ongoing crisis to a foreign observer who doesn’t fully appreciate the nuances of domestic politics. “Yes, we have the largest economy on the planet. Yes, we want to maintain global credibility. Yes, the process of extending our borrowing authority is incredibly easy and could be completed in about 10 minutes. No, some members of our legislative branch have decided they no longer want the United States to honor its obligations and pay for the things they’ve already bought.”

I suspect global observers would find this truly inexplicable. As it happens, I’d agree with them.

Ezra Klein added yesterday that to the rest of the world, “the United States looks insane right now.”

They’re dealing with real problems that their political systems are struggling to solve. The United States’ political system is creating fake problems that it may choose to leave unsolved.

“The United States was the one bright spot in the world recovery,” says OECD Secretary General Angel Gurria. “It was leading the recovery! Leading the creation of jobs! This unfortunate situation with the budget and debt happens at the moment it was looking good.” […]

At best, the United States is slowing its recovery — and that of the rest of the world. At worst, it’s going to trigger another global crisis. That’s why, Gurria says, his concern isn’t that the United States’ economy is weak, but that its political system is.

It’s heartbreaking that so much of the world is now laughing at us, not because we have crises we can’t solve, but because members of one party — the one that lost the most recent national elections — insist on manufacturing new crises to advance their unpopular agenda.

To reiterate what we discussed last week, there’s a global competition underway for power and influence in the 21st century. Americans have rivals who are playing for keeps. We can either be at the top of our game or we can watch others catch up.

And it’s against this backdrop that House Speaker John Boehner and his Republican colleagues shut down the government, threaten default, fight tooth and nail to strip Americans of their health care benefits, and keep spending levels so low we’re kicking children out of Head Start centers while our global competitors invest heavily in education.

It’s as if some have a vision in which we no longer lead and we aim for second place on purpose.

Great nations can’t function the way we’re struggling to function now. The United States can either be a 21st-century superpower or it can tolerate Republicans abandoning the governing process and subjecting Americans to a series of self-imposed extortion crises.

It cannot do both.

China is talking about “a de-Americanized world.” It’s time for Republicans to decide whether they intend to help them.

 

By: Steve Benen, The Maddow Blog, October 15, 2013

October 16, 2013 Posted by | Debt Ceiling, Default, GOP, Government Shut Down | , , , , , | Leave a comment

“At The Altar Of International Finance”: Romney “Goes For The Gold” In London’s Libor Village

In fairness to Mitt Romney, he did not schedule his $75,000-a-plate money grab at the altar of international finance when he heard that—via the Libor bank-rate scandal—Londoners were practicing his kind of crony capitalism.

Even before the Bain capitalist knew that bankers in London were lying to regulators and fixing interest rates in order to run up their profits—engaging in activities that the governor of the Bank of England said “meet my definition of fraud”—Romney was excited about getting a piece of the London bankster action.

But Romney campaign has has gone to Olympian lengths to make their candidate’s British sojourn seem to be about something other than the looting of London.

The Republican presidential contender’s international fundraising operation—and, yes, he does have an international fundraising operation—scheduled two major events to coincide with the opening of the Olympic Games. As a candidate who is having trouble touting his business experience (Bain Vulture Capital) and his governing experience (RomneyCare), the presumptive Republican presidential nominee calculated that it might be a good idea to take a trip across the pond to highlight his (somewhat less controversial) management of the 2002 Winter Olympics in Salt Lake City.

The Olympics are being held this year in east London, just beyond the fabled “City” precincts which are, along with New York’s Wall Street, the nerve center of global banking and financial dealmaking. And Romney is using his London sojourn to skim off some cash—make that a lot of cash—for his campaign accounts.

Or, as London’s Independent headlines the story: “Romney Goes for the Gold in London.”

Romney Victory Inc., the incredibly complex fundraising structure the candidate has developed to funnel money into his many campaign operations, has scheduled two London events for July 26:

1. A meet-and-greet where the price of admission is $2,500 per person.

2. A dinner where the places at the tables go for as much as $75,000 per person.

Both the Romney and Obama campaigns have raised money overseas from American expatriates (who, along with Green Card holders, are allowed to donate to US campaigns even if they do not reside in the United States or work for US-based banks or corporations). Obama’s had the upper hand in the global fundraising race by a $3.1 million to $1.4 million margin. But that will change after Romney collects his London haul.

Why? Because Romney is getting together with with The City’s wealthiest, and most scandal-plagued, banksters.

Or, at least, most of them.

Bob Diamond, the former Barclay’s banking empire chief executive who was forced to resign after it was revealed that his bank manipulated the Libor (London InterBank Offered Rate) with false reports about interest rates, was supposed to be at the head of the table. But with his busy schedule of testimony before parliamentary committees and investigators of the biggest banking scandal in recent years, the American expatriate has been forced to absent himself from the festivities.

“Mr. Diamond decided to step aside as a co-host for the upcoming London reception to focus all his attention on Barclays,” the Romney camp announced. “We respect his decision.”

Why shouldn’t they? One of Diamond’s closest lieutenants at Barclays—which just paid $453 million in fines stemming from the Libor scandal—is still co-chairing Romney’s big-ticket event in London.

Barclay’s lobbyist Patrick Durkin’s name is right there at the top of the invite to “a private dinner with Governor Mitt Romney at a central London location.”

Also on the list of forty-seven co-chairs of Romney’s London fundraisers are the names of top players in other banks that have been targets of the interest-rate manipulation scandal, including:

* Bank of Credit Suisse chief executive Eric Varvel (Varvel has already donated $100,000 to Romney’s “Restore Our Future” Super PAC.)

* Deutsche Bank managing director Raj Bhattacharyya

* HSBC managing director Whitfield Hines

Executives from Goldman Sachs, Blackstone and Wells Fargo Securities—and, of course, Bain Capital Europe—are also on the list.

Why would these Americans associated with international banks be giving maximum money to this particular presidential candidate? Gee, could it have anything to do with the fact that there are calls for criminal prosecution of the bankers who were involved in interest rate manipulations that effectively rigged the rates that helped to determine who consumers in the United States and other countries obtained mortgages and paid on credit cards?

“Much more needs to be done,” Senators Carl Levin (D-MI) and Jack Reed( D-RI) and ten of their colleagues wrote in a mid-July letter to financial regulators and Attorney General Eric Holder. “Banks and their employees found to have broken the law should face appropriate criminal prosecution and civil action.”

Electing a friendly president, who might put the brakes on those prosecutions, just became a very high priority for the men who pull the financial strings not just on Wall Street but in London.

Approached by Britain’s Telegraph, one invitee hailed Romney’s “American understanding of capitalism. A prominent lawyer who will be attending one of Romney’s London bashes explained that the Republican candidate understands “very important things [that] people here in the UK also understand.”

That sort of “understanding” is worth a lot to embattled bankers. Certainly, the $75,000 it will cost for what the Independent describes as a “chance to whisper some of their own policy preferences into the ear of the man who may—or may not—be US president.”

 

By: John Nichols, The Nation, July 20, 2012

July 21, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

   

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